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An empirical look at software patents

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  • James Bessen
  • Robert M. Hunt

Abstract

U.S. legal changes have made it easier to obtain patents on inventions that use software. Software patents have grown rapidly and now comprise 15 percent of all patents. They are acquired primarily by large manufacturing firms in industries known for strategic patenting; only 5 percent belong to software publishers. The very large increase in software patent propensity over time is not adequately explained by changes in R&D investments, employment of computer programmers, or productivity growth. The residual increase in patent propensity is consistent with a sizeable rise in the cost effectiveness of software patents during the 1990s. We find evidence that software patents substitute for R&D at the firm level; they are associated with lower R&D intensity. This result occurs primarily in industries known for strategic patenting and is difficult to reconcile with the traditional incentive theory of patents

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  • James Bessen & Robert M. Hunt, 2004. "An empirical look at software patents," Working Papers 03-17, Federal Reserve Bank of Philadelphia.
  • Handle: RePEc:fip:fedpwp:03-17
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    References listed on IDEAS

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    1. Scherer, F. M., 1982. "The office of technology assessment and forecast industry concordance as a means of identifying industry technology origins," World Patent Information, Elsevier, vol. 4(1), pages 12-17.
    2. Scherer, F M, 1982. "Demand-Pull and Technological Invention: Schmookler Revisited," Journal of Industrial Economics, Wiley Blackwell, vol. 30(3), pages 225-237, March.
    3. Brian S. Silverman, 1999. "Technological Resources and the Direction of Corporate Diversification: Toward an Integration of the Resource-Based View and Transaction Cost Economics," Management Science, INFORMS, vol. 45(8), pages 1109-1124, August.
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    Patents;

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